People who travel to various parts of the country or outside of the country generally find it necessary to find a means of carrying currency in a safe and secure way. Whether they travel for business or tourist purposes, one of the most common ways of transporting cash or currency on them is through the use of travelers checks. These checks are generally purchased in various face amounts in consideration for a fee paid to the issuer of the checks at the time of their purchase. The transaction usually requires the purchaser to pay for the face amount of the check plus the purchase fee, and to sign and date the checks in the presence of an agent representing the issuer of said checks. Once the checks are properly issued, the purchaser can redeem them at any time and any place in exchange for goods purchased by the proper cashing or redemption procedure of the travelers checks.
Unfortunately, however, the purchaser or consumer of these travelers checks are denied the benefits of having any interest paid to them as a result of the passage of time while the checks are in their possession and the currency in the possession of the issuer. The institution issuing the checks has the distinct advantage of using the consumers' funds for its own purposes, especially if the purchaser of the travelers check does not redeem or cash it for a long period of time. The longer the period of time that the consumer holds the check, the more advantageous it is for the issuing institution because of the corresponding amount of time the institution can utilize the actual currency.
Accordingly, this invention relates to a concept whereby the purchaser of an instrument, such as a travelers check, can obtain interest from the issuing institution on the basis of the amount represented by the instrument in question and the time it is held by the purchaser. This concept, therefore, creates an interest bearing financial instrument that generates and pays interest without the security of a holder of such an instrument to establish an underlying bank account or credit reference of any kind in his or her name.
In order to carry out the concept of the invention, however, the calculation of interest due on such an instrument becomes critical to the instrument's function. For example, in order for a bank, a non-entity bank, a vender of goods or services, or a merchant, or the like, to redeem the value of the instrument, including the interest due, in exchange for currency, an easy and viable method must be made available to the parties concerned for the accurate calculation of the interest due. Thus an apparatus or method must be made available to the consumer and/or entity redeeming the instrument, so that they can easily and reliably calculate the total value of the instrument after a given passage of time. Such a method or apparatus, therefore, becomes an integral part of the invention in order to protect both the consumer or purchaser of the instrument and the person or entity redeeming the instrument, especially where interest rates may vary over a period of time.
The calculation of the interest that becomes due on the instrument is also important if the instrument is to be processed through regular banking channels. Thus, in the case of a travelers check, the amount of interest due at the time of its redemption will be dependent on the rate of interest given at the time of the travelers check's purchase and the amount of time that has transpired up to the point of cashing the travelers check. In order for the check to be processed through the regular banking channels, the correct or proper amount of value must be entered on the check before it can be properly redeemed. In addition, the redeemer or payee's identity must be entered on the travelers check along with the data and countersignature of the purchaser. Once the redeemer or payee has exchanged currency or goods in return for the face value of the check plus the proper amount of interest, and has endorsed the check (in this case on the reverse side), the payee can deposit the check into his or her bank to collect its full value from the issuer. The correct amount of interest calculated, therefore, becomes of paramount importance if the purchaser and payee are to collect the appropriate amount of funds owed them ultimately by the issuer of the travelers checks.